Amtrak, formally National Railroad Passenger Corporation, federally supported corporation that operates nearly all intercity passenger trains in the United States. It was established by the U.S. Congress in 1970 and assumed control of passenger service from the country’s private rail companies the following year. Virtually all railways, with the exception of a small handful, signed contracts with Amtrak. The corporation pays the railroads to run their passenger trains and also compensates them for the use of certain facilities, including tracks and terminals. It bears all administrative costs, such as those incurred for the purchase of new equipment, and manages scheduling, route planning, and the sale of tickets.

Electric Amtrak train in New Jersey.

Joseph Barillari

Amtrak was founded to relieve American railroads of the financial burden of providing passenger service and to improve the quality of that service. Since about the early 1960s, the railroads had lost millions of dollars annually on their passenger lines as a result of a steady decline in their ridership and increases in their operating costs. In order to avert further losses, many of the companies dropped their unprofitable routes. In 1950 there were approximately 9,000 passenger trains in service, which carried just under 50 percent of all intercity traffic. By 1970, however, there were only about 450 trains still in operation, with a total share of the passenger traffic amounting to a mere 7 percent.

Amtrak train traveling through farmland.

D. Falconer—PhotoLink/Getty Images

The creation of Amtrak marked the first time that rail passenger service received any form of direct financial assistance from the U.S. government (although land grants had been given to railroads to spur completion of a transcontinental line in the 19th century). Congress provided Amtrak with an initial grant of $40 million and authorized an additional $100 million in government-guaranteed loans. Amtrak received hundreds of millions of dollars in federal funds annually to cover operating losses throughout the remainder of the 20th century. Although the corporation derived income from ticket sales and from its mail-carrying service, its revenues were not enough to offset its expenditures. Facing a decline in federal funding in the mid-1990s, Amtrak reorganized its corporate structure, initiated changes in service, and sought alternative financing, including subsidies from state governments.

Amtrak’s passenger ridership increased steadily after 2000. Notable was the inauguration late that year of the Acela Express in the heavily traveled Northeast Corridor between Washington, D.C., and Boston, a high-speed electrified train that could cruise at some 125 miles (200 km) per hour and reach top speeds of about 150 miles (240 km) per hour. Amtrak also explored the possibility of opening other high-speed lines, including between Chicago and St. Louis and in the San Joaquin Valley of central California. However, the corporation continued to operate at a deficit each year, and its federal subsidies consistently exceeded a billion dollars beginning in 2002. Debate over those subsidies continued in Congress, and by 2013, 18 states were subsidizing shorter-distance routes within their respective boundaries. In addition, Amtrak received some $1.3 billion for improvements to the system’s infrastructure as part of the American Recovery and Reeinvestment Act (2009).

An Acela Express high-speed Amtrak train headed for Boston on the Hell Gate Bridge in New York City.